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BlackBerry feeling the heat from Apple's iPhone

MONTREAL - Even though the BlackBerry is the top smartphone in North America, the iPhone is right behind and other players will also put pressure on its premiere position, analysts say.

MONTREAL - Even though the BlackBerry is the top smartphone in North America, the iPhone is right behind and other players will also put pressure on its premiere position, analysts say.

"Next year, I think will be a much bigger year for Apple and the iPhone in Canada," said IDC Canada analyst Kevin Restivo.

Bell (TSX:BCE) and Telus (TSX:T) switched on their new, advanced wireless networks this week and started selling the iPhone for the first time. Rogers (TSX:RCI.B) had been offering the iPhone for more than a year.

Now that all three of Canada's big wireless carriers can offer the iPhone, the sexy and sought-after touchscreen phone is expected to end up in more consumers' hands.

Close to 25 per cent of Canadian consumers are expected to adopt smartphones by the year's end, said Restivo, senior analyst of mobility research.

"This is where Apple stands to benefit so as a result it will gain share as the market grows," Restivo said from Toronto.

RIM (TSX:RIM) will also grow, but it's share will decrease over time, he said.

"It will own a smaller piece of a larger pie."

Google's Android operating system, in HTC and Motorola smartphones, will also offer more competition for RIM.

Competition is already heating up in the consumer space with life-style-oriented TV commericials from RIM and mobile phone company HTC.

"Consumers are notoriously fickle, so you need to have brand alliance. Brand alliance is everything in the smartphone game and that's why you are seeing this wave of commercials," Restivo said.

Analysts are divided on how much RIM can keep growing.

Citigroup Global markets analyst Jim Suva said in a note this week that the BlackBerry maker is facing greater competition from other smartphone companies and he slashed the company's target price.

Suva downgraded the stock to a "sell" with a target of US$50 from a "buy" rating valued at $100, which sent the stock down on Monday.

On Friday, shares in RIM closed at $63.07, up $1.42, on the Toronto Stock Exchange.

Restivo said RIM will keep growing but it's a question of how much.

"The mix is changing and RIM needs to grow faster in emerging economies and overseas, if it's to keep up the growth rates," he said.

"I think RIM is hoping to capture on the growth of mobile devices in general in those countries."

For the third quarter ended Sept. 30, about two million mobile phones were shipped in Canada, down about eight per cent even though shipments of smartphones grew, IDC said Friday.

Globally, vendors shipped a total of 43.3 million smartphones during the third quarter, up 4.2 per cent from the 41.5 million units shipped in the same quarter last year, IDC said.

Finland's Nokia took the top spot with 39 per cent of the smartphone market share. RIM was second with 19 per cent market share and Apple was third with 17.1 per cent.

HTC and Samsung were fourth and fifth with 5.6 per cent and 3.5 per cent respectively, IDC said.

Technology analyst Carmi Levy said RIM will have to work to maintain its position as competition intensifies.

"It needs to come to the party with its best suit on," said Levy of Toronto's AR Communications Inc.

ScotiaCapital analyst Gus Papageorgiou dismissed competitive fears and said RIM is expected to stay among the leaders.

"That others are launching devices or software platforms does not guarantee success," he wrote in a research note. "We believe RIM meets all the key success factors for industry success and very few other players come close."

 
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